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7.54 pm
Mr. Michael Jabez Foster (Hastings and Rye): In common with other hon. Members who have spoken, I declare an interest, albeit the minimal interest of being at the end of a list of consultants on the headed notepaper of the firm in which I was previously a partner.
If it were only a few extra pounds that were needed to save the legal aid fund, the House would probably support the provision of that sum. However, the encouraging thing about what the Government are doing is that they are not seeking to save money--at least, not in the short term. The budget for the coming year is higher than the previous Administration's projected budget.
Radical change is needed in the legal aid system that we inherited, because it is costly but still fails to live up to the demands placed upon it. For 25 years, before I entered the House, I was regularly engaged in civil legal aid work and my delight at being elected to Parliament was almost matched by the knowledge that I would not have to fill in another legal aid form.
The old system had become bureaucratic. I have estimated that about 20 per cent. of the time of people doing legal aid work is spent filling in forms, reporting to the Legal Aid Board, and so on. Even within the franchising system, that is still a significant, time-wasting, frustrating and costly element. Having spent 20 per cent. of 25 years doing that, I hope that my first five years in Parliament will be more productive than the five years of my life that I wasted filling in forms.
Of greater concern, however, is the injustice that the present system metes out. One was frequently asked to advise on a case that had little merit, but, because the individual met the qualifications for legal aid and was within scope, one would take counsel's opinion, and counsel would suggest that the case was worth a try.
The injustice was not, of course, done to the happy recipient of the state's generosity, but to the unhappy defendant, who was often bound to settle, perhaps unjustly, because the cost of defending a case against a legally aided party was prohibitive. Perhaps there was no great sympathy for a defendant who was an insurer, but the justice of the case was still questionable.
Other claims were abandoned either because the claimants were out of scope for legal aid--a growing phenomenon because of the changes that were made to cap expenditure--or because the contribution called for was so significant that it deterred the would-be litigant, even if he or she had a good case. Litigation had therefore become a pastime for no one but the rich and the poor.
The present system also encourages waste. That is not only the waste in the administration of the process, which I have already mentioned, but the waste that results from the incentive for lawyers to make the most of the legal aid certificate. Milking the legal aid system, although it may be done by only a minority of lawyers, will inevitably be a temptation when there is no one at the "point of sale" to challenge the wisdom of the procedures adopted.
Last night I asked my taxi driver, "Why do you go by the shortest route?" He replied, "Because you're sitting next to me." He admitted that when students used his services at the expense of a language school, he took the long route because someone else was paying. That is what happens, or at least what can happen, with the existing legal aid system.
For those reasons, among others, I welcome the Government's initiative in the Bill. However, I have some comments on two aspects of it. First, there is the extension of conditional fees, which most hon. Members have spoken about. Secondly, there are the contracting arrangements proposed for the delivery of services.
As for conditional fees, I see no reason why a solicitor should not back his or her judgment. They are not being asked to become bookmakers simply to display some confidence in their own advice. I learned of the benefits of conditional fees by accident when I realised that appearing at industrial tribunals was regarded as a non-contentious activity and was therefore eligible for conditional fees. In such non-contentious proceedings it is possible to operate on a conditional fees basis, and I and many other practitioners have found that that provides an effective opportunity for litigants to take their cases, and for the practitioners who have offered that opportunity to be rewarded. The new system gives a greater incentive because of the possible extra bonus available.
I have experience of some of the benefits of conditional fees. First, when one is on them, one is careful about advising that a case is worth pursuing. More especially, one does no more than one must to bring the case to a successful conclusion. The extraneous process with which one can become bound up is to be avoided at any--indeed, one's own--cost. Proper reward based on successful outcome is a challenge that lawyers should seize with both hands. Coupled with the rule reforms, it should enable lawyers to practise real law rather than the tedium of unnecessary procedure for the benefit of no one.
There is also the opportunity of the completely new market of people with genuine disputes to settle but who cannot afford the process under the present system. That is the Government's new deal job creation scheme for lawyers. The legal profession should not complain. It also means that litigants who have not before had the chance will be able to take their cases to law.
I have a reservation about how the rules on disclosure of a conditional fee agreement would operate. To put defendants, such as insurers, on notice of the rate of uplift would be to put them on notice of the perceived strength of the case. The present conditions on legal aid certificates do not make that necessary.
Legal aid, by its nature, is limited. My limited experience suggests that few people with reasonable cases that would have passed the merit test of the Legal Aid Board, or even, under a franchising agreement, of a
solicitor, will be denied the opportunity of a CFA. Solicitors already offer no win, no fee opportunities in the national and local press every week.
I am also convinced that the Government are right about the purchase of legal services. A mix of private and voluntary sector provision based on expertise and price will provide the most effective delivery system. Although great play is often made of the theoretical choice that litigants enjoy in choosing representatives, the reality is that it is not as great as it seems. Under the present system, litigants choose their solicitor by recommendation, by where they live or by referral. They often have neither the knowledge nor the ability to judge quality until it is sometimes too late.
The franchising arrangements that have already developed have to some extent been helpful in ensuring that the firms selected for particular areas of work are competent. However, I have reservations about the measurement of that competence, which seems to be based more on compliance with procedures than on expertise offered or success rate. I hope that, under the new regime, more effective means of monitoring results will ensure that high-quality services are provided. That applies in two situations in particular. First, as contracts are available to non-legally qualified bodies, the advice that they give must be monitored by legally qualified personnel, not simply by an administrative procedure.
The second concerns the extension of rights of advocates. I believe that that extension is correct, but it is essential that the advocates let loose are competent in advocacy. Many solicitors would acknowledge that they are not particularly good at it; some barristers are not, but they find out sooner.
Even the present franchise arrangements are valuable, in that successful franchisees gain experience in a particular area of law rather than, as previously, dealing with areas for the first time. That applies especially in sparsely populated areas, where practitioners dabble in all manner of work. While the contracting system is open to the criticism that there may be restriction of choice, it will ensure that the lawyer acting in a case is experienced in the field to which the contract relates, and, I hope, subject to monitoring of results. In many ways, a client with the benefit of a contracted lawyer will have more to be sure than the private paying client who chooses his own.
Mr. Oliver Heald (North-East Hertfordshire):
I declare an interest as a barrister for more than 20 years. I also lecture on law from time to time. I listened with great interest to the enthusiastic speech of the hon. Member for Hastings and Rye (Mr. Foster). He said that it was a very good Bill for everyone. I would say that it is good in parts, a curate's egg of a Bill.
We should welcome the setting up of the community legal service. I was on the committee of the Free Representation Unit, a body set up by the Bar to give free
legal advice in areas of unmet need. Its members included not only barristers but solicitors, social workers and social administration experts. I had the unenviable task of choosing which 15 of the 80 cases that had come in we could service. At that time, some years ago, there was great unmet need in the social welfare field. It is right that lawyers should want to do pro bono work.
The approach with the community legal service suggested in the Bill is a good thing, but we must all share the concern about its funding. The Lord Chancellor said that its funding will be
That is a good part of the Bill. I am not at all sure about conditional fees. I agree with my hon. Friend the Member for Solihull (Mr. Taylor) that, in certain circumstances, conditional fees can be a good way to finance legal cases. However, the field of personal injuries has been singled out and will rely totally on conditional fees. I am concerned about that. Like the hon. Member for Hastings and Rye, I know that the gateways to legal aid have often not been monitored adequately and that cases have been pursued that should not have been. However, one would not say that that was the case in respect of personal injuries.
The results show that some 91 per cent. of legal aid money spent on personal injuries cases has been recovered. That success is striking. The money from the legal aid budget spent on personal injuries is about £33 million. Is that the area to choose to make a point about conditional fees? I would have said that it was not.
Some hon. Members have pointed to the fact that trade unions provide excellent services in this area. I agree that, particularly in some cases that involved a huge investment of time in preparation and medical research, the trade unions have done excellent work. However, not every case has a trade union to fund it. The personal injuries cases of most concern are often deserving ones where much money needs to be invested to prove them. There are cases where it is not certain medically what the condition is or how it is caused. Such cases need huge sums to be spent to establish them. In cases that are deserving but of less than certain outcome, it is unlikely that many firms of solicitors will want to expend the large sums necessary to ground them. The hon. Member for Great Grimsby (Mr. Mitchell) gave the example of the tobacco case, which has recently been before the courts. In that case, £2.5 million was spent on a no win, no fee basis. The solicitor who was involved said plainly, never again. There are important and deserving cases where funding will not be available.
There are other cases--not necessarily involving conditions such as emphysema and white finger--such as motoring accidents that are out of the ordinary. For example, there is the case where to establish the liability of the opponent it is necessary to bring in an accident reconstruction expert. It is necessary also to have the vehicles involved thoroughly examined and to present
medical evidence about the injuries. On first receiving a case as a lawyer, one would say, "There is nowhere near enough information." At that moment, someone would have to decide whether to take the risk of undertaking the case on a conditional fee basis. Many firms would say, "It is too risky to spend that sort of money trying to establish a case."
In such a case, the cost of insurance would be high. It is said that for the run-of-the-mill case it would be£300, but in a case where a large sum needs to be invested to establish liability, there is talk that the insurance premium might be as high as £20,000, a sum which is beyond the reach of most individuals.
We know that at present 91 per cent. of legal aid provision expended is recovered, which suggests that it is an economic process. If we proceed on a no win, no fee basis with an uplift of up to 100 per cent. and recovery from the opponent of insurance costs incurred, the overall legal cost per case will rise. As a consequence, insurance premiums could increase in personal injury cases. Overall, we could move from a system that is very efficient and does not cost much money in the scheme of things to one that, on average, costs more per case. Yet in the most deserving cases, where legal aid is most appropriate, no one will be prepared to fund the action. I have concerns about conditional fees.
I am not entirely convinced that civil legal aid should be dealt with exclusively through contracts with quality assured firms of solicitors. One of the beauties of the English system is that high street solicitors have been ready to take on a wide range of work. An individual can approach such a firm and obtain advice. Of course, some cases are extremely complicated, but there are many where it is not necessary to be an absolute expert to be able to give sensible, competent advice. Access to justice in a locality is important and there is a danger that that will be denied by the scheme before us. With the best of intentions, it will lead to much red tape and many solicitors' firms saying, "We cannot go through the process of becoming quality assured. We shall not do this work." That will deny people access to justice.
As for the criminal justice defence system, I do not share the optimism of the hon. Member for Great Grimsby that there will be an improvement if there are salaried lawyers on both sides of the case who are both paid by the state. I share the experience of my hon. Friend the Member for Beaconsfield (Mr. Grieve) of having worked on circuit as a barrister in my early days, appearing in criminal cases. On one day I would be the prosecutor and on the next the defender. The system meant that every barrister within an area--in my case, East Anglia--knew one another. That was important because it meant that standards of behaviour were high. It meant also that, because we had the experience day in and day out of appearing as prosecutors and defenders, we were more objective.
We were not always prosecutors, and that gave us a certain objectivity. When we were defending, we were not so defence minded as not to give sensible advice to a client. I worry about a system where there will be a criminal defender and a state prosecutor, with everyone entrenched in undertaking the same sort of work all the time. Will that provide quality and competence? Will standards be maintained?
"what is left over . . . after the prior claims of criminal legal aid have been met."--[Official Report, House of Lords, 21 January 1999; Vol. 596, c. 738.]
That means that overspending on criminal cases could well lead to a cut in funding to the community legal service. I strongly support the idea of the service, but I hope that it will get the money and means to make it work.
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